ASSESSING THE POTENTIAL OF RAILWAYS TO REDUCE CO2 EMISSIONS: A COINTEGRATION STUDY OF ESTONIA'S TRANSPORT SECTOR

This The transportation sector is a major contributor to CO2 emissions, playing a significant role in exacerbating climate change. Railways, known for their greater energy efficiency compared to other modes of transport, present a viable solution for mitigating emissions, particularly in countries like Estonia. In 2014, transport-related CO2 emissions in Estonia were recorded at 12.7%, marking an overall upward trend since 1995, despite experiencing some fluctuations over the years. This study aims to explore the long-term equilibrium relationship between CO2 emissions from transport and railway passenger kilometers in Estonia through the application of cointegration analysis. Utilizing Engle-Granger and Phillips-Ouliaris cointegration tests, the analysis reveals a stable, long-term equilibrium relationship between the two variables. The findings suggest that an increase in railway passenger kilometers could potentially lead to a reduction in CO2 emissions from transport. These results underscore the importance of enhancing railway infrastructure and usage as a strategic measure to curb transportation-related emissions and contribute to environmental sustainability.